Sybase posts profit, beats target

Mike Tarsala

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SAN FRANCISCO (CBS.MW) -- Sybase on Tuesday posted a fourth-quarter profit and beat analysts' estimates due partly to stronger sales of database software for handheld computers.

"We feel good about what's on the books right now, and we feel good looking out into 2004," CEO John Chen said in an interview.

Sybase shares
SY,
-1.78%
fell 17 cents, or about 1 percent, to close at $21.88 in regular-session trading on the New York Stock Exchange after the announcement. Most software stocks ended lower on the day. Sybase stock has nearly doubled from its April 2003 trough of $11.30 a share.

Dublin, Calif.-based Sybase reported net income for the fourth quarter of $37.7 million, or 38 cents a share. A year earlier, the company lost $9.8 million, or 10 cents a share.

Excluding one-time items such as restructuring costs, Sybase said it earned $39.2 million, or 39 cents a share, up from $29.3 million or 30 cents in the same period a year earlier. By that measure, analysts polled by Thomson First Call had expected 31 cents a share. The results were aided by a one-time tax credit that added about 6 cents a share to the company's earnings.

Revenue was barely changed at $210.7 million, vs. $210.6 million a year earlier. Analysts had been expecting about $206 million, according to Thomson First Call.

Sybase's largest markets for its software are customers in the financial, health care, telecom and government sectors. Chen said that software spending at financial companies has improved, and that health care and government customers continue to spend.

"But with telecom we're still waiting," Chen said. "We have good feeling about the sector, but I haven't seen the money yet."

Sybase ended the period with $470.5 million in cash, equivalents, and short-term investments, up from $295 million in the same period a year earlier. Sybase said it generated $55.1 million in cash flow from operations in the quarter.

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